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Press Release

Syracuse Area Medical Practice to Pay Nearly $2 Million to Resolve False Claims Act Exposure

For Immediate Release
U.S. Attorney's Office, Northern District of New York
Anesthesiology Practice Improperly Billed for Moderate Sedation Services

SYRACUSE, NEW YORK – New York Anesthesiology Medical Specialties, P.C. d/b/a New York Spine and Wellness Center (New York Spine & Wellness) agreed today to pay $1,941,850.29 to resolve claims that it improperly billed for moderate sedation services, announced Acting United States Attorney Grant C. Jaquith and New York State Attorney General Eric T. Schneiderman.


New York Spine & Wellness is a medical practice focusing on pain management, and spine and back procedures, with locations in the Syracuse, New York area.  During certain procedures, New York Spine & Wellness physicians placed patients under moderate sedation.  Moderate sedation produces a state where the patient retains the ability to respond to verbal direction and remains capable of maintaining their airway without assistance.  Generally, the administration of moderate sedation reduces pain and anxiety in patients who undergo therapeutic and diagnostic procedures by reducing their perception of pain and/or fear. 


The American Medical Association released guidance on the billing requirements for moderate sedation services in October 2011 to clarify that the service is billable only when the physician spends at least 16 minutes face-to-face with the patient.  The Medicare Administrative Contractor for New York that processes providers’ claims confirmed the 16-minute rule in February 2012 in an explanatory article released to its listserv and also maintained on its website for a period of approximately one year.  New York Spine & Wellness routinely billed for moderate sedation services when its physicians spent less than the required 16 minutes with the patient.  These moderate sedation claims were submitted in connection with claims for underlying therapeutic and/or diagnostic services for which New York Spine & Wellness also billed and was paid. Although New York Spine & Wellness utilized the services of an independent billing company, New York Spine & Wellness retained the contractual obligation to code its services accurately. 


In or about January 2015, a private insurance company rejected two of New York Spine & Wellness’s claims for moderate sedation services because, as described by New York Spine & Wellness’s billing company, the “Medicare 16 minute span rule to bill [the] code” was not satisfied.  In mid-June 2015, the same private insurance company performed an audit and rejected New York Spine & Wellness’s claims for moderate sedation services where the documentation did not support that the procedure lasted more than 16 minutes.  The billing company advised New York Spine & Wellness to review the audit findings concerning moderate sedation services.  New York Spine & Wellness continued to bill for moderate sedation services after mid-June 2015 without the required 16 minutes of face-to-face time.  The improper billing stopped after New York Spine & Wellness was contacted by the United States Attorney’s Office for the Northern District of New York in connection with this investigation.  


Acting United States Attorney Grant C. Jaquith said:  “We remain committed to holding healthcare providers to account when they submit false claims.  Providers should have policies and procedures in place to ensure that they are familiar with applicable billing requirements before submitting claims.  Although New York Spine & Wellness is being held responsible for its conduct, we appreciate that it resolved this matter outside litigation and worked cooperatively through the investigation.”  


“New York Spine and Wellness Center, like all health care providers, must be held to a high standard of ethical behavior,” said Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”).  “HHS-OIG will continue to ensure that providers that bill federal health care programs do so in an honest manner.”


“Today’s agreement represents a win for New Yorkers, ensuring that over $660,000 will be returned to the New York Medicaid Program and that the provider does not improperly bill Medicaid for this service in the future,” said Attorney General Schneiderman.  “I’m proud of the federal and state collaboration involved in this investigation as we work to protect New York’s taxpayers, and appreciate the provider’s cooperation.”


The investigation and settlement were the result of a coordinated effort among the United States Attorney’s Office for the Northern District of New York, the Defense Criminal Investigative Service, the Department of Health and Human Services Office of Inspector General, and the New York State Attorney General’s Office.  The United States was represented by Assistant U.S. Attorney Michael D. Gadarian, and the State of New York was represented by Special Assistant Attorney General Paul R. Berry. 

Updated October 3, 2017

False Claims Act